Directors Loan

Loan instead of mortgage

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A director of a cash rich company (100% shareholder) wants to borrow circa £500k from the company to fund his property purchase rather than have a mortgage.

The company will charge a fixed rate of interest (for the lifetime of the loan) at HMRC's official rate which is currently 3%. Repayment will be made by deduction from salary with a loan agreement in place as well.

Any tax or other consequences to this?

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By stratty
13th Mar 2017 16:55

Depends on the circumstances at hand but I would anticipate s.455 tax charge too.

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